B&G Foods Q2 2026 Earnings Results & Report

B&G Foods EPS Results

• Actual EPS: $0.06
• Consensus EPS: $0.0553
• Beat/Miss: Beat by +$0.0047
• One Year Ago EPS: $0.04
• EPS Beat Rate: 3 of last 8 quarters

B&G Foods Revenue Results

• Actual Revenue: $383.28 million
• Expected Revenue: $394.92 million
• Beat/Miss: Missed by -$11.64 million
• YoY Revenue Growth: -9.70%

B&G Foods (NYSE:BGS) is a packaged-food company that manufactures, sells and distributes branded and private-label shelf-stable and frozen foods. Its products are marketed primarily to retail grocery stores, mass merchandisers, club stores, e-commerce retailers and food-service customers.

The company’s portfolio has included brands such as Green Giant, Ortega, Cream of Wheat, Clabber Girl, Dash, Spice Islands, Las Palmas, Underwood and Maple Grove Farms. Its product categories include vegetables, beans, Mexican foods, hot cereals, baking ingredients, seasonings, condiments, sauces, pickled products and other meal and cooking components.

B&G Foods serves consumers primarily in the United States and Canada. The company has expanded over time through the acquisition and integration of established food brands, allowing it to offer products across multiple categories and price points. B&G Foods is headquartered in Parsippany, New Jersey, and its common stock trades on the New York Stock Exchange under the symbol BGS.

B&G Foods Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted EBITDA increased 4.1% to $60.4 million in the second quarter, while adjusted EPS rose to $0.06 from $0.04 a year ago. Margin improved to 15.8%, supported by portfolio changes, lower SG&A, tariff refunds, and better spice costs.
• Neutral Sentiment: Net sales declined 9.7% to $383.3 million, largely because of divestitures and the loss of a 53rd week; however, base-business sales were essentially flat year to date. Second-quarter base-business sales fell 2.9%, with volume declines partly offset by pricing and mix.
• Positive Sentiment: The acquired College Inn and Kitchen Basics brands contributed approximately $13.2 million of quarterly sales and improved margins, while Kitchen Basics is showing growth potential. B&G also generated $23.9 million from its new Green Giant U.S. Frozen contract-manufacturing operation, which is already modestly profitable.
• Negative Sentiment: Specialty segment Adjusted EBITDA fell $8.9 million because of unfavorable raw-material and manufacturing costs and investment in Crisco pricing. Higher interest expense, including the 11% senior notes and a temporary period of double interest during refinancing, also weighed on earnings.
• Neutral Sentiment: Management reaffirmed fiscal 2026 guidance of $1.735 billion-$1.775 billion in sales, $275 million-$290 million in Adjusted EBITDA, and adjusted EPS of $0.575-$0.675. The pending Green Giant Canada divestiture is not included in guidance and remains subject to regulatory approval.

Presentation

[Operator]

Good day, and welcome to the B&G Foods second quarter 2026 earnings call. Today's call, which is being recorded, is scheduled to last about an hour, including remarks by B&G Foods management and the question and answer session. I would now like to turn the call over to AJ Schwab, Director, Corporate Strategy and Business Development for B&G Foods. AJ?

[AJ Schwab, Director of Corporate Strategy and Business Development at B&G Foods]

Good afternoon, and thank you for joining us. With me today is Bruce Wacha, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the investor relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance and therefore, undue reliance should not be placed upon them. We refer you to B&G Foods' most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact our company's future operating results and financial condition. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

[AJ Schwab, Director of Corporate Strategy and Business Development at B&G Foods]

We will also be making references on today's call to the non-GAAP financial measures: Adjusted EBITDA, segment Adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted gross profit percentage, base business net sales, and segment adjusted expenses. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Bruce will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and his thoughts concerning the outlook for the remainder of fiscal 2026 and beyond. I would now like to turn the call over to Bruce.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Thank you, AJ Good afternoon, everyone. Thank you for joining us today. I'm going to cover a number of topics on our call this afternoon, which will include our change in CEO and why we are so excited to have Rob Mills join our executive leadership team at B&G Foods. Our portfolio reshaping efforts, which consists of the divestitures of low-margin, working capital intensive business, including Green Giant US Frozen, Le Sueur US Shelf Stable, and the Don Pepino brand over the past 12 months. The establishment of our Green Giant US Frozen contract manufacturing business, which we expect to provide a modest but consistent contribution to Adjusted EBITDA and cash flows, as well as the acquisition of the higher margin cash generative College Inn and Kitchen Basics brands.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Our second quarter results, which demonstrate our ability to grow Adjusted EBITDA and net cash provided by operating activities despite a challenging industry backdrop. An update on our fiscal 2026 guidance, which we are reaffirming at previous levels across net sales, Adjusted EBITDA, and adjusted diluted earnings per share. While it is taking time to implement this portfolio reshaping, and we are still evolving today, we can see the green shoots as our business results continue to improve, and we continue to better position ourselves for a more steady and more balanced financial performance in the future. Before I move on to our performance in the second quarter, I'd like to take a moment to comment on our CEO transition and the appointment of Rob Mills as our Chief Executive Officer.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Having served on our board of directors for the past eight years, Rob brings a unique combination of deep knowledge of our company and extensive operating experience. He understands our brands, our customers, our opportunities, and importantly, the challenges that we need to address. This familiarity significantly reduces the traditional transition period for a new CEO and positions Rob to move quickly, establish clear priorities, and accelerate the actions necessary to improve execution, strengthen the business, and create sustainable shareholder value. Rob's experience is particularly well-aligned with what B&G Foods needs at this point in our evolution. He joins us from Tractor Supply Company, where he has held senior executive leadership roles spanning strategy, digital commerce, technology, and business operations with direct P&L accountability.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

During his tenure, Rob helped lead large-scale transformation and growth initiatives across a complex multi-billion-dollar public company while building deep experience in digital, data, AI, productivity, and operating execution. Rob also brings extensive M&A and corporate development experience, including evaluating, acquiring, and integrating businesses. This combination gives Rob a broad perspective on organic and inorganic value creation, disciplined capital allocation, and active portfolio management. Rob comes into this role with a strong sense of urgency and a clear understanding of B&G Foods.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

During his first 90 days, he intends to spend considerable time with our employees, customers, business partners, and shareholders, listening and developing an even deeper understanding of the challenges and opportunities in front of us. His eight years on our board provide an important head start, allowing him to use this period not simply to learn the business, but to quickly establish priorities and begin translating these priorities into action. Rob's immediate focus will be on strengthening execution, maximizing the potential of our core brands, improving productivity and cash generation, and accelerating the strategies that can return the business to sustainable growth. Rob is excited about the future of B&G Foods and the opportunity to build upon the strength of our brands while bringing new capabilities and greater speed to the organization, and so am I.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We believe that his experience in digital transformation, data, and AI can help us modernize how we operate, better understand and serve our customers, consumers, and improve decision making and identify new opportunities for growth and productivity. Rob is also looking forward to engaging directly with the analyst and investor community in the months and years ahead and sharing more about his priorities and vision for B&G Foods. We believe that Rob has the right combination of institutional knowledge, operating experience, strategic leadership, M&A expertise, and transformation capabilities to move quickly, make disciplined decisions, and accelerate value creation for our shareholders. We are very excited to have Rob as part of the B&G Foods family. Rob will be joining our third quarter earnings call in November. Now back to the quarter.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

For the second quarter of 2026, we generated $383.3 million in net sales, a net loss of $4 million, or $0.05 per diluted share, adjusted net income of $4.9 million, or $0.06 per adjusted diluted share, Adjusted EBITDA of $60.4 million, and Adjusted EBITDA as a percentage of net sales of 15.8%. As we review our second quarter 2026 results, we will highlight the impact of our various M&A transactions, which include the divestitures of the Don Pepino and Le Sueur US brands in the summer of 2025, and the divestiture of the Green Giant US Frozen business in early March 2026. Simultaneous with the Green Giant US Frozen divestiture, we commenced the contract manufacturing business, pursuant to which we produce Green Giant US Frozen products at our vegetable manufacturing facility in Mexico on behalf of the new owner of the Green Giant US Frozen business.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

In addition, we acquired the College Inn and Kitchen Basics brands in late March of 2026. Unless otherwise noted, the three divestitures are included in our Q2 2025 financials, but not our Q2 2026 financials. While the new contract manufacturing business and the acquired brands are included in our Q2 2026 financials, but not our Q2 2025 financials. Because the divestiture of the Green Giant Canada has not yet closed, there is no impact to our net sales or Adjusted EBITDA. However, because Green Giant Canada is classified as an asset held for sale for accounting purposes, the pending divestiture does impact how Green Giant Canada assets are carried on our balance sheet and within certain line items of our P&L. We expect the Green Giant Canada divestiture to close during the third quarter and look forward to providing an update after the divestiture has been completed.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Net sales for the quarter of 2026 decreased by $41.1 million, or 9.7%, to $383.3 million, from $424.4 million for the second quarter of 2025. The decrease was primarily attributable to the Green Giant US Frozen, Le Sueur US Shelf Stable, and Don Pepino brand divestitures, partially offset by incremental net sales from the Green Giant US Frozen contract manufacturing business and the acquisition of the College Inn and Kitchen Basics brands. Net sales of divested brands contributed approximately $68 million to Q2 2025 net sales. Net sales of acquired brands, plus the contract manufacturing business, contributed approximately $37 million in net sales during the second quarter of 2026. Base business net sales for the second quarter of 2026 decreased by $10.2 million, or 2.9%, to $346.3 million as compared to $356.5 million for the second quarter of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

The decrease in base business net sales was driven by a decrease in volume of $15.5 million, or 4.3% of base business net sales, partially offset by an increase in net pricing and product mix of $5.1 million, or 1.4% of base business net sales, and the positive impact of foreign currency of $0.2 million, or 0.1%, of net sales. The timing of the July 4th holiday cost us about one and a half shipping days in the quarter, or approximately $5 million-$7 million of net sales in the second quarter of 2026. For the year to date period, base business net sales are on track with our plan, and we are essentially flat or up $0.2 million to $711.4 million for the first two quarters of 2026 from $711.2 million for the first two quarters of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Gross profit was $79.6 million for the second quarter of 2026, or 20.8% of net sales, and adjusted gross profit was $83.7 million or 21.8% of net sales. Gross profit was $87 million for the second quarter of 2025, or 20.5% of net sales, and adjusted gross profit was $89.1 million or 21% of net sales. Gross profit as a percentage of net sales increased due to the acquisition of higher margin College Inn and Kitchen Basics brands, the divestiture of the lower margin Green Giant US Frozen business, and certain tariff refunds received from the U.S. government during our second quarter. Selling, general, and administrative expenses decreased by $6.6 million or 14% to $40.6 million for the second quarter of 2026 from $47.2 million for the second quarter of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

The decrease was comprised of a decrease in warehouse expenses of $3.7 million, general and administrative expenses of $2.7 million, consumer marketing expenses of $1.7 million, and selling expenses of $0.8 million. These were partially offset by an increase in acquisition, divestiture-related, and non-recurring expenses of $2.3 million. Expressed as a percentage of net sales, selling, general, and administrative expenses improved by 0.5 percentage points to 10.6% for the second quarter of 2026 as compared to 11.1% for the second quarter of 2025. We continue to follow these costs closely, and we are taking steps to reduce our ongoing SG&A commitments to better reflect the size of our business going forward, minimizing the impact of stranded costs on our overhead structure from recent divestitures.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We generated $60.4 million of Adjusted EBITDA, or 15.8% of net sales in the second quarter of 2026, compared to $58 million or 13.7% in the second quarter of 2025. The increase in Adjusted EBITDA was primarily attributable to the acquisition of the College Inn and Kitchen Basics brands, the divestiture of the Green Giant US Frozen business, the commencement of the Green Giant US Frozen contract manufacturing business, and tariff refunds received from the U.S. government during the second quarter. Net interest increased $2.7 million, or 7.5%, to $38.5 million for the second quarter of 2026 from $35.8 million for the second quarter of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

The increase in net interest expense was primarily attributable to an increase in average long-term debt outstanding during the second quarter of 2026 relative to the average long-term debt outstanding during the second quarter of 2025 and the 11% interest rate on our new senior unsecured notes due 2031. During the second quarter of 2026, net interest expense was also negatively impacted in connection with our debt refinancing because the new 11% senior unsecured notes due 2031 were issued on June 10, 2026 prior to the redemption of our 5.25% senior unsecured notes due 2027. Therefore, during a 24-day period, we incurred interest expense on both sets of notes, which was only partially offset by the interest earned on the net proceeds of the issuance of the 11% senior unsecured notes due 2031.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Depreciation and amortization was $14.5 million in the second quarter of 2026, compared to $16.7 million in the second quarter of 2025. We had a net loss of $4 million, or $0.05 per diluted share for the second quarter of 2026, compared to a net loss of $9.8 million or $0.12 per diluted share for the second quarter of 2025. The net loss for the second quarter of 2026 was primarily attributable to approximately $9.7 million of acquisition, divestiture-related expenses and non-recurring expenses, including certain organizational restructuring efforts to reduce the cost overhang related to the divestitures. We had adjusted net income of $4.9 million, or $0.06 per diluted adjusted share in the second quarter of 2026. In the second quarter of 2025, we had adjusted net income of $2.9 million, or $0.04 per adjusted diluted share.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Adjustments to our EBITDA and net income are further described in our earnings release that was issued today and our 10-Q, which we expect to release later this week. I would now like to touch on the results by business unit for the second quarter. Net sales for Spices & Flavor Solutions increased by $0.1 million, or 0.1%, in the second quarter of 2026 to $96.6 million from $96.5 million in the second quarter of 2025. Spices & Flavor Solutions segment Adjusted EBITDA increased by $7 million or 29% in the second quarter of 2026 compared to the second quarter of 2025. The increase in segment Adjusted EBITDA is primarily due to an increase in net pricing and the impact of product mix, an improved cost environment for spices relative to the prior year, and tariff refunds received from the U.S. government during the second quarter.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Net sales for meals increased $6.4 million or 6.2% in the second quarter of 2026 to $110.5 million from $104.1 million for the second quarter of 2025. The acquisition of College Inn and Kitchen Basics brands added approximately $13.2 million of net sales during the quarter. Meals segment Adjusted EBITDA increased by approximately $0.1 million, primarily driven by the acquisition, which offset declines in certain brands. Net sales for specialty decreased by $5.9 million or 4.4% in the second quarter of 2026 to $128.9 million from $134.9 million in the second quarter of 2025. The decrease was due in part to the divestiture of the Don Pepino business, which generated $1.8 million of net sales in the second quarter of 2025. Specialty segment Adjusted EBITDA decreased by $8.9 million in the second quarter of 2026 compared to the second quarter of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

The decrease was due in part to the divestiture of the Don Pepino business, certain unfavorable cost comparisons in raw materials, increased manufacturing expenses, and our investment in Crisco oil pricing, which, on the positive side, benefited from increased volumes in the quarter. Financial performance for the frozen and vegetable unit during the second quarter of 2026 and the second quarter of 2025 are not comparable due to the impact of the Green Giant US frozen divestitures and the impact of our new contract manufacturing agreement for Green Giant US Frozen. Net sales of Green Giant Canada remained strong and increased by $0.5 million or 2.4% to $23.4 million for the second quarter of 2026, compared to $22.9 million for the second quarter of 2025.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Separately, the new Green Giant US Frozen contract manufacturing business generated $23.9 million in net sales during its first full quarter of operation following our sale of the Green Giant US Frozen business. Our team is looking to build this business, add new customers, and increase its volumes. Before I discuss 2026 guidance, I would like to remind the audience that we continue to live in unpredictable times, and depending on the day, we are at war in the Middle East. Our 2026 guidance reflects only what we know today and, for example, does not factor in significant changes in inflation, tariff policies, or the potential impact of escalation in conflicts in Eastern Europe, the Middle East, or Latin America could have on our results. Also, please note that our guidance reflects the expected impacts only of acquisitions and divestitures that have already closed.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

In other words, our guidance reflects the expected impacts of Don Pepino and Green Giant US frozen divestitures, the commencement of the Green Giant US frozen contract manufacturing business, and the College Inn and Kitchen Basics acquisition. Our guidance does not reflect the expected impact from the pending Green Giant Canada divestiture because that divestiture has not yet closed. Also, as a reminder, our guidance reflects that fiscal 2026 has one fewer week than fiscal 2025, which had a 53rd week. The benefit of the 53rd week was included in our fiscal 2025 results, and we will lap that benefit of approximately $18 million in net sales during the fiscal fourth quarter of 2026. That said, we are reaffirming our guidance.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We are maintaining fiscal 2026 net sales guidance in the range of $1.735 billion-$1.775 billion, Adjusted EBITDA guidance in the range of $275 million-$290 million, and Adjusted EBITDA as a percentage of net sales in the range of approximately 15.8%-16.3%. Based on this guidance, we still expect adjusted diluted earnings per share to be in a range of $0.575-$0.675 per share. Additionally, we expect for full year 2026 interest expense of $157.5 million-$162.5 million, including cash interest of $150 million-$155 million, depreciation expense of $40 million-$45 million, amortization expense of $17 million-$19 million, cash taxes of approximately $5 million or less, an effective tax rate of 26%-27%, and CapEx will likely be at the lower end of our $30 million-$35 million target.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

As a reminder, we are making strong progress against our long-term goals, which include improving the base business net sales trends of the core business to the long-term objective of 0%-2% growth. Reshaping the portfolio for future growth, stability, higher margins, and strong cash flows. Proactively managing our capital structure by using excess cash flow and the net proceeds of divestitures to facilitate debt reduction and ultimately to fund strategic acquisitions. We believe that we have the ability, even in a challenging environment for packaged food companies, to maintain a stable base business and enhance our performance through our growth by acquisition strategy, while simultaneously returning a meaningful portion of our excess cash to investors through our longstanding commitment to both debt reduction and a healthy dividend policy.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We are very excited about the future of B&G Foods, and we thank you for tuning into our earnings call this afternoon. This concludes our remarks, and now we would like to begin the Q&A portion of our call. Operator?

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Your first question comes from Andrew Lazar with Barclays. Please go ahead.

[Andrew Lazar, Analyst at Barclays]

Great, thanks. Good afternoon, Bruce.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Hey, Andrew. How are you?

[Andrew Lazar, Analyst at Barclays]

Hey there. Good. Maybe to start off, can you quantify how much the tariff refund benefited Adjusted EBITDA in the quarter and what your expectation would be for that benefit for the full year if there is more to come?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah, we have not disclosed the number. It is relatively modest. If you go back to 2025 results, as we articulated then, we had about $8 million-$9 million of total incremental tariff exposure. That included tariffs where we were the direct importer of record and where we were not the importer of record. Where we were the importer of record is about a little bit less than half of that, and that is largely what we got back in the second quarter. We expect to get some more back throughout the remainder of the year, and in certain cases, we will invest that in the business on a go-forward basis.

[Andrew Lazar, Analyst at Barclays]

Got it. All right, and then, I think on the last call, there was quite a bit of discussion around potential inflation building, even outside of just soybean oil as it relates to Crisco, but other items too, and that might necessitate some incremental pricing moves, despite it being a challenging environment for everyone. Where do you stand on inflation at this stage for this year? What might that mean for pricing, and have you taken any or plan to, and then, what sort of elasticity should we be thinking about this time around, just given the consumer is under more pressure than perhaps in the last couple of rounds of pricing the industry took? Thanks so much.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah, I think on our last call, we were right around the time where both diesel fuel, oil, West Texas Intermediate, and soybean oil were all at their peak levels. They are a little bit inside of where they were before with a couple moves up and down. That is still the largest area where we have seen inflation so far this year. There is a little bit coming in spices as well. That is primarily where we have seen it. We have not seen people taking pricing on fuel costs, but we certainly have seen that within vegetable oil.

[Andrew Lazar, Analyst at Barclays]

Got it. Thank you.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Our expectation is to cover that inflation where we can.

[Andrew Lazar, Analyst at Barclays]

Right. In the way that you have done it on Crisco in the past, whatever it is, a year or two with that new process. Okay, thank you.

[Operator]

Next question, David Palmer with Evercore. Please go ahead.

[David Palmer, Analyst at Evercore]

Thanks. I wanted to ask you about non-measured channels. I think last quarter they might have been up low double digits or at least some sort of double digits, and now it feels like it might maybe up low single digits. Wondering what reason there is for that and how you're thinking about non-measured going into the second half.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. We're still seeing pretty strong growth across some of our non-measured channels. Canada has been strong, continues to be strong. The food service where we have it has continued to be pretty strong. Then within Spices & Flavor Solutions, our private brands relationship continues to be strong, as well as some of the other ones. We still see that strength. It's up, it's offsetting some of the damage in the regular track channels. But quite frankly, we need to improve the performance of our retail branded business, and I think that's a lot of the focus that Rob is going to bring on a go-forward basis.

[David Palmer, Analyst at Evercore]

Okay. Just with regard to what we're seeing when we look at some of the scanner data, it looks like Spices & Flavor Solutions is under pressure, but you're having some areas of strength elsewhere, like Cream of Wheat. Could you maybe make a comment about the wins and losses and where you see the most opportunity near and medium term with the branded business? I'll pass it on.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. We are actually seeing pretty good trends in our hot breakfast overall, which would be Cream of Wheat, McCann's, and the Pure Maple Syrup, Grandma's Molasses. So there is pockets of strength in there. On the spices, where there is a little bit of noise is some shift in some of the brands, particularly around Tone's and Weber, that are going from branded to partner brands. So that creates a little bit of the distortion that you are seeing. But look, we need to improve our performance across the board. We have had really good performance in some of the non-track channels. We need to see further improvement in the track channels as well.

[David Palmer, Analyst at Evercore]

Thank you.

[Operator]

Next question, Robert Moskow with TD Cowen. Please go ahead.

[Robert Moskow, Analyst at TD Cowen]

Thanks. Maybe I will just go right to that last point. Tone's and Weber are going from brands to partner brands. Is that new, Bruce? Can you give a little more context as to what the rationale for that is?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. It's a continuation of what we've seen over time. We saw this very much early on when we bought the ACH business in 2016, 2017, and we're just seeing sort of the follow-through there. So in a couple spots, we're losing Tone's distribution, and it's being replaced with us providing distribution of similar product, similar amount of SKUs on the private brand side.

[Robert Moskow, Analyst at TD Cowen]

Okay, but you're not recharacterizing those two brands as private label or-

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

No

[Robert Moskow, Analyst at TD Cowen]

giving it to a retail or anything like that? Okay.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

No. We're keeping those brands and look, we want to improve the performance in those brands.

[Robert Moskow, Analyst at TD Cowen]

Okay. Got it. Can you touch on College Inn and Kitchen Basics? The sales were lighter than what we had forecasted. Maybe we got the seasonality wrong, but can you talk to your early learnings on those two?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. Sales for both, I think, are just a little bit ahead of where we had forecasted, but maybe we were a little bit more conservative than you were. I think within consumption, there's a little bit of softness in College Inn, which we knew when we bought this. Number two, Northeast regional brand. We have to price it right. I think under the last year or two of prior ownership, particularly leading up to the bankruptcy and post-bankruptcy, we think it was mispriced in the market. We are fixing that. We're looking forward to a strong holiday season.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We kind of knew what we were getting here, which is something that we got to really protect and drive cash flows with, but manage that brand as it is, which is a number two Northeast regional player where it's been around for a long time and makes good money where we sell it. Kitchen Basics, I think we continue to be surprised by this business. We really like it. We think it's got some growth opportunity in addition to having some pretty good margins. The category has been pretty good. To be fair, it's off-season, but people are still buying a lot of broths and stocks in the summer, but it is off-season, and so it's a little bit smaller. The true test for us really will be as we integrate during the winter months, the more traditional soup season in the third and fourth and first quarter.

[Robert Moskow, Analyst at TD Cowen]

Okay. Thank you.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yep.

[Operator]

Next question, Karru Martinson with Jefferies. Please proceed.

[Karru Martinson, Analyst at Jefferies]

Good afternoon. I couldn't help but notice a couple of comments here on implementing portfolio reshaping, active portfolio management. You've done a lot of the heavy lifting here. Is there more to do, or are there pockets when you look at your portfolio that you want to accelerate on?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

I think, Karru, there's always more to do with B&G. We tend to be pretty active in M&A, and we're focused on improving our portfolio. I think a big focus for the last year and a half has been the Green Giant strategic review, and we're nearing the end of that, and that's a big lift there. There are still things that we'll look at opportunistically across the portfolio from the divestiture standpoint, but I wouldn't put a big expectation there. College Inn, Kitchen Basics, we want and we expect to do more things like that in the future where we're adding some nice incremental growth and sales and profitability to our business.

[Karru Martinson, Analyst at Jefferies]

I'm sorry, I missed it. Did you give a tariff refund number?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We did not.

[Karru Martinson, Analyst at Jefferies]

Okay.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

It's not a huge number.

[Karru Martinson, Analyst at Jefferies]

Okay. Thank you very much. Appreciate it.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yep.

[Operator]

Next question, Hale Holden with Barclays. Please go ahead.

[Hale Holden, Analyst at Barclays]

Hey, Bruce. On the tariff refunds, which I think you outlined as all in the Spices & Flavor Solutions line, was that part of your original guidance or is that something that's a put and take as you came across it in the middle of the year?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We always knew that it was out there. It's probably a put and take as it factors in and we've got a little bit of both here, as we always do.

[Hale Holden, Analyst at Barclays]

Yep. When you think about risk to the next two quarters that get you to the low end or the high end of that guidance range, maybe you could talk through some of the puts and takes that you're seeing on the ground.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. I think if you look at the guidance that we laid out, it's a little bit more moving pieces because of the M&A transactions. To be within our range, it is kind of a flat to down 2% in net sales kind of base business, and then plus or minus the rest of the M&A. We're not looking for anything heroic. We feel comfortable where we are. We do know that we love the 53rd week last year, and you'll hear me cry about it when we give our fourth quarter results this year, but we feel like we're on pace given where we are year to date.

[Hale Holden, Analyst at Barclays]

Great. Just last question is, anything changed in Canada or we are just waiting on the regulatory process there for the sale?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Just waiting on the regulatory process. We are chomping at the bit to get completed, just like I am sure you guys already hear about it, but it takes time.

[Hale Holden, Analyst at Barclays]

I am sure you are. Thank you, Bruce. I appreciate it.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yep.

[Operator]

Next question, Carla Casella with JPMorgan. Please go ahead.

[Carla Casella, Analyst at JPMorgan]

Hi. Just one follow-up on Hale's. You mentioned Canada. The $1.735 billion to $1.775 billion revenue, that includes the Canada business because it hasn't been sold, right?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. We're going to include Canada in our numbers until we sell it, until the transaction is done.

[Carla Casella, Analyst at JPMorgan]

Okay. The proceeds, originally, we were using a placeholder of $60 million, but I think that's when the assets held for sale were closer to that amount. Would the proceeds be now closer to the $32 million assets held for sale?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yeah. Proceeds are going to move around as inventory moves. The one thing to keep in mind is we announced this transaction, I think, back in the third quarter, around where we're near peak inventory levels. Second quarter, we're near trough inventory levels. We're coming into pack season right now, and so inventory will be higher and therefore value that we receive in the transaction will be higher. So it's kind of yes to both of your numbers. Ultimately-

[Carla Casella, Analyst at JPMorgan]

Okay, it's-

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Ultimately, it'll probably be closer to the September of last year number, but we'll see.

[Carla Casella, Analyst at JPMorgan]

Right. It's just going to match whatever's on the assets held for sale, though there's no incremental amount?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

There's moving pieces within that, and there's a small true-up on top of it.

[Carla Casella, Analyst at JPMorgan]

Okay. Then just with the asset sale versus the acquisitions, as you look at the overhead costs, are you sitting on stranded costs or is there a need to add in additional overhead with College Inn? I am just trying to get a sense for a good run rate for SG&A. It came down nicely this quarter, a lot lower than we expected. I am just trying to get a sense for whether you need to add costs back in or is there still more room to cut costs?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

I think you will continue to see costs reduced into early third quarter, and then we should be largely at a run rate from there.

[Carla Casella, Analyst at JPMorgan]

Okay. Then can you just talk to the M&A environment? Are there assets out there, things that you would look at, or could you consider further asset sales to accelerate balance sheet improvement?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

We are always looking at both. There are deals that are being announced. There are deals that have been speculated on for some period of time that are kind of sideways and haven't been announced. We have seen some large deals get signed and completed in our general kind of space. There is stuff out there. I think it is a matter of finding things at the right price, whether we are buying or selling, and I don't know what the next thing is, but at some point there will be another one. We continue to look for ways to improve our portfolio over time.

[Carla Casella, Analyst at JPMorgan]

Okay, great. Thanks.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Thanks, Carla.

[Operator]

Once again, please press star 1 if you would like to ask a question. Next question comes from William Reuter with Bank of America. Please proceed.

[William Reuter, Analyst at Bank of America]

Good afternoon. Just to make sure I understand where we are on the tariffs. I think you said it was $8 million or $9 million. You were the importer of record for less than half of that. I think you got most of that back in the second quarter. Will you be receiving proceeds where you were not the importer of record? Will those vendors be, I guess, sending those proceeds that they receive to you?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Where appropriate, we're going to do our best we can to recover every dollar.

[William Reuter, Analyst at Bank of America]

Okay. All right. I guess that could be a little bit of a tailwind, too, to your results in the second half of the year. Is that right?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

It could.

[William Reuter, Analyst at Bank of America]

Okay.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

But again, just keep in mind, the relative size of this is not massive.

[William Reuter, Analyst at Bank of America]

Yep. Understood. Then, we are hearing, you had mentioned that you are not pushing through fuel surcharges and you are not hearing of others doing the same. Freight, excluding fuel, domestic freight charges are pretty elevated. Is that putting pressure on your margins in the back half of the year?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Define pressure. It is not helping margins in the back half of the year, but it is not. For us, fuel is just one part of our logistics cost. We need every penny. So yeah, it is putting a little bit of pressure and like we said, we have got a lot of puts and takes, so we have got to find some to offset it.

[William Reuter, Analyst at Bank of America]

Got it. Then just lastly for me.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Certainly the fuel impact is not radically different than where it was the last time we spoke. In fact, it's probably better or less scary or less bad.

[William Reuter, Analyst at Bank of America]

Right. Okay. I can't remember the actual number you said. It was something in the 20s, the revenue from the contract manufacturing. Where are you at in terms of is that business profitable at this scale, or do you need to add business in order for that to generate EBITDA?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

It's running at about $25 million, give or take, maybe just a hair under that per quarter. So annualized, that might be just under $100 million. That will not be the 2026 number, because we really only started running that in the second quarter. The business is modestly profitable. Not game changer, but modestly profitable, and it's a benefit to EBITDA. We want that to be a sustainable business. We would love to grow it. We want to continue to service our largest customers as well as possible.

[William Reuter, Analyst at Bank of America]

Got it. I guess this will be the last one, I promise. How challenging do you think it's going to be to add incremental customers and volume to that facility?

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

It's selling. It takes effort, but we actually think we've got a really good facility. And we've got a couple nice little wins already on it. But not game changer, but nice little business that we have and we want to continue to run.

[William Reuter, Analyst at Bank of America]

Got it. All right. Thanks for taking all my questions.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Yep. Thanks.

[Operator]

There are no further questions. This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.

[Bruce Wacha, EVP of Finance and CFO at B&G Foods]

Thank you

Participants

Executives

• AJ Schwab, Director of Corporate Strategy and Business Development
• Bruce Wacha, EVP of Finance and CFO

Analysts

• Andrew Lazar, Analyst at Barclays
• David Palmer, Analyst at Evercore
• Robert Moskow, Analyst at TD Cowen
• Karru Martinson, Analyst at Jefferies
• Hale Holden, Analyst at Barclays
• Carla Casella, Analyst at JPMorgan
• William Reuter, Analyst at Bank of America